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Sunday, October 25, 2009
Economics always guide adoption

In her recent article, "Study Says Economics Not A Driving Factor in Cloud Computing Adoption", Lori MacVittie reports on several studies that show that the current macroeconomic climate is not having a big impact on cloud computing adoption. In particular, the cost-savings purported to be offered by the cloud do not seem to be the major selling point. And yet, companies are adopting cloud computing technologies left and right, so it must make business sense: in other words, economics are driving adoption.

Many analysts look solely at virtualization and elastic computing services like Amazon's EC2 as the major technology at play in the infrastructure-as-a-service market. While certainly it takes less time to spin up a virtual machine image in the cloud than it does to rack and install actual hardware, this is probably not the major contributor for cost savings; at even a modest enterprise size, it's still cheaper to run the servers yourself. Indeed, even with virtual hosts, you must still manage capacity, allocate applications to servers, and monitor application health, meaning your technical operations staff is still very much needed.

Overlooked in many ways here are what I would call application building blocks available in the cloud, like Amazon's Simple Storage Service (S3), Simple Queueing Service (SQS), and SimpleDB. Google App Engine has its BigTable-based datastore, which with a modicum of effort can be exposed as a GData-style data webservice. In all of these cases, these application building blocks offer:

  1. very simple programming interfaces;
  2. automatic distribution of data across data centers;
  3. easy scalability; and
  4. understandable cost models
These capabilities would require a significant amount of effort for an enterprise to develop for itself. For example, I estimate developing an internal, enterprise-class S3 service might require a half million dollar investment in labor and servers, assuming you already had multiple data centers in place and could leverage existing open source software like Cassandra, Project Voldemort, or Dynomite.

Instead, time-to-market pressures are the real forces behind cloud computing adoption in the enterprise. These application building block services allow for rapid prototyping of new functionality, where the production architecture and the development architecture are the same. Where business agility to react to new opportunities is crucial, especially in the ever-changing Internet landscape, the ability to rapidly bring features to market, test their adoption, and then evolve is the key to long term competitiveness. Companies that cannot roll out new consumer value out quickly will find themselves left behind by more agile competitors. As the competition adopts cloud computing and gains time-to-market advantages, companies are forced to follow suit.

Cloud computing adoption is always about economics.

Monday, July 6, 2009
Cloud Confusion Amongst IT Professionals
[Editor's note: This is a guest article by Liz Ebbrell from Version One, Ltd., a provider of electronic document management software.]

The findings of a survey by document management software company, Version One, has revealed that 41% of senior IT professionals admit that they "don't know" what cloud computing is. Version One carried out the research with 60 senior IT professionals (IT directors and managers) across a range of UK public and private sector organisations. This research follows-on from a similar survey carried-out by Version One which highlights that two-thirds of UK senior finance professionals (finance directors and managers) are confused about cloud computing.

Of the remaining 59% of IT professionals who profess to know what cloud computing is, 17% of these understand cloud computing to be internet-based computing while 11% believe it is a combination of internet-based computing, software as a service (SAAS), software on demand, an outsourced or managed service and a hosted software service. The remaining respondents understand cloud computing to be a mixture of the above.

Despite cloud computing being in the media spotlight, only a minority of respondents (5%) say that they use it "a lot" and less than a quarter of those surveyed (19%) reveal that they only use cloud computing sparingly. Almost half of respondents (47%) admit that their company doesn’t use cloud computing with the remaining 29% conceding that they "don't know" whether their organisation uses it or not.

Julian Buck, General Manager of Version One, says, "Although this is only a small survey of IT professionals, the results are nonetheless very alarming, especially as IT professionals are the very people that need to understand cloud computing so that they can explain its benefits to management."

Buck continues, "It is clear from the survey results that there are a number of contrasting views as to what cloud computing really is, which is hardly surprising in light of the many different cloud computing definitions in the public arena. For instance, Wikipedia defines it as 'Internet-based computing' while Gartner refers to it 'as a service' using Internet technologies. IT expert, John Willis, writing in his cloud blog says that 'virtualisation is the secret sauce of a cloud' and provides different levels of cloud computing. With so many definitions circulating, clarity is urgently needed."

Only 2% of respondents say that their company is "definitely" going to invest in cloud computing within the next twelve months whilst 30% state that their organisations "may" invest in this technology. 45% admit that they "don’t know" whether their organisations will be investing in it or not with the remaining 23% stating that they currently have no investment plans. For those who definitely or maybe have plans to invest in cloud computing, some of the key business drivers cited include reduction in overheads and paper, ease of use, cost savings and the ability to provide collaborative tools for teaching and learning.

Buck adds, "If organisations are going to embrace cloud computing in the future it's essential that a single, simplified explanation is adopted by everyone. Failure to cut through the confusion could result in organisations rejecting this technology and missing out on the benefits it provides."

--Liz Ebbrell, Version One, Ltd.